STAR BUSINESS REPORT

The National Board of Revenue (NBR) is considering a range of measures to strengthen revenue collection in the upcoming fiscal year 2026-27 (FY27), including the reintroduction of a wealth tax, a new inheritance tax, higher rates for the ultra-rich, and a rationalisation of existing tax exemptions.

NBR Chairman Md Abdur Rahman Khan outlined the proposals yesterday at a pre-budget discussion with the Economic Reporters’ Forum (ERF) at the revenue authority’s headquarters in Dhaka.

The moves are being eyed as the country faces mounting pressure on public finances, with the government struggling to meet revenue targets amid a widening fiscal deficit and rising debt servicing costs.

“We are exploring the possibility of reintroducing a wealth tax,” Khan said at the event, noting that Bangladesh had such a levy from 1963 until it was abolished in 1999.

He acknowledged challenges around asset valuation and data availability, and said that a committee has been formed to examine the matter.

Khan added that the NBR is weighing the introduction of an inheritance tax, at least on a limited scale, with a focus on high-value property transfers.

On tax exemptions, Khan signalled a gradual shift away from the status quo. “While exemptions are necessary to attract investment and generate employment, they cannot continue indefinitely. We are committed to gradually phasing them out and bringing beneficiaries into the regular tax regime.”

The NBR also plans to raise the top marginal income tax rate for ultra-rich individuals from 30 to 35 percent, a measure tentatively set for FY28.

“We want to maintain consistency with previously declared prospective tax measures,” Khan said, adding that he would place the proposal before the finance minister.

More immediately, he said the NBR is considering raising the tax rate for individuals earning over Tk 1 crore annually by around five percentage points from FY27.

Khan pointed to international comparisons to argue for higher rates at the top end. “In developed countries, marginal tax rates range between 45 and 55 percent, whereas our rates remain relatively low. Historically, our rates were as high as 60 percent, but we have gradually reduced them.”

He also flagged concerns about budget efficiency, noting that despite significant growth in the budget over the past decade, spending quality remains a challenge. “If taxpayers see that their money is being used effectively, public trust will increase.”

TOBACCO, SMEs, DIGITAL REFORM

The upcoming budget may also include measures to raise tobacco product prices, Khan hinted yesterday.